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4 Ways Discounts Kill Your Business

The doom loop of discounting. a graphic to show how discounts destroy a business.
Don’t fall into this trap: The Doom Loop of Discounting!

The graphic above is my drawing of an idea I call “The Doom Loop of Discounting”.

This graphic shows the reality that as your sales drop and you offer a discount that each instance becomes less and less effective.

Over time, discounts become a part of who you are…you are a commodity, a discounter.

Knowing that and “knowing” that are two different things. So let me show you 4 ways that discounts are killing your business…you may not even realize it.

Lost Profits:

This is the jumping off.

Numbers will vary depending on your business, but you’ll lose between 10-40% of your profit for each 1% you discount your price.

Undermines Your Brand Equity:

For a business, around 30%+ of the equity of their business is in their brand value.

The fastest way to undermine your brand equity is by offering price based promotions.

They are a signal that you don’t believe anything you are saying about your brand, product, or service.

The challenge here is that you won’t even know this is happening because people also love discounts while they also start to think less of you.

Wasting Time on Bad Opportunities:

There is a faction that will tell you that “all business is good business” and I’m here to tell you that they are wrong.

Discounts will often lead you to be forced into the “all business is good business” theme because you’ve made a few mistakes.

You’ve confused revenue and profit to be the same thing. They aren’t.

You’ve confused all opportunities with good opportunities. They aren’t.

You’ve likely bought the fallacy that people are buying due to price. They almost never are, unless you are a commodity.

Your Opportunities Become Limited (Perceived Value Drops):

A lot of times your discounts make it harder to get opportunities.


You start to carry the stench of desperation.

Your perceived value drops and people don’t want to work with a hobbled business, a brand in decline, or a business that signals it doesn’t have faith in its own offerings.

Does this make sense to y’all?

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